By Juhana Rossi HELSINKI--The U.S. investment firm Dodge & Cox has increased its stake in the embattled Finnish telecom equipment and device maker Nokia Corp. (NOK) to 8.4% of all outstanding shares, investment research company Morningstar Inc. (MORN) said on its Finnish language website Wednesday. Morningstar says San Francisco-based Dodge & Cox increased its holding in Nokia by 63 million shares during the second quarter to a total of 314 million shares at the end of June. At the end of March Dodge & Cox owned 251 million Nokia shares, or 6.8% of all 3.74 billion outstanding shares. Exact information on the distribution of Nokia's ownership isn't publicly available, and Morningstar's report is based on fund reports released by Dodge & Cox. Nokia will publish its June quarter earnings report on July 18. The company is expected to have narrowed its quarterly net loss markedly from the net loss of EUR1.4 billion in the year earlier period. The price of Nokia's shares has risen by 23% since the beginning of April this year. At 1108 GMT, Nokia shares were up 0.13% at EUR3.09.
I have a feeling that institutional investors will increase dramatically in the 2H of this year.
Now that it's clear BBRY will not gain enough momentum to be a major player, institutions will have to focus on the big 3: iOS, Droid, and Win8. iOS and Droid own 85% of the market, while Win8 owns ~ 5%. Who will have a higher likelihood of growing their earnings? The companies that are at or near their peak, or the company with tons of room to grow?
Once enough institutions start buying, it will create a snowball/momentum effect. The more the price grows, the more analysts turn favorable, the more institutions buy in, the more the price grows.
Dodge and Cox has had a position in Nokia for some time. Listened to a discussion between the Bossman and two of his best people. Firm looks very closely at management, manufacturing and distribution capabilities and from what I could gather take a long term approach to many of the firms they invest in (not dissimilar than many other investment firms). In the discussion they referred to Nokia and Hewlett Packard and pointed out great opportunities over time. At the time they had about 250 million shares in their main investment account and two funds that they manage for the Dodge and Cox firm.
I was impressed with their approach to their portfolio and the funds they represent.
Firm had a tough 2008 but subsequently they have had good returns since then with the exception of one year.
Sentiment: Strong Buy